Spaniards pull more money out of banks in July

Reuters Staff

2 Min Read

FRANKFURT (Reuters) - A rush by consumers and firms to pull their money out of Spanish banks intensified in July, with private sector deposits falling almost 5 percent as Spain was sucked into the centre of the euro zone debt crisis.

Private-sector deposits at Spanish banks fell to 1.509 trillion euros at end-July from 1.583 trillion in the previous month.

However, in a more positive sign, Greek banks stopped bleeding deposits in July after June elections decreased the worst fears of the country dropping out of the common currency bloc, European Central Bank data showed on Tuesday.

Speculation about Greece possibly quitting the euro was intense in May when anti-bailout parties saw a strong showing in elections, but the Greek central bank said the process had reversed after the elections.

The ECB’s deposit data for July confirmed this. Private-sector deposits in Greek banks rose about 2 percent, after a fall of almost 5 percent in the previous month.

The total rose to 159.4 billion euros at end-July from 156.2 billion a month earlier, but is still one-third below the peak in December 2009.

Ireland posted a 1-percent increase in deposits and Portuguese deposits remained roughly flat in July, as they did in Italy.

Monthly fluctuations in the figures are common, though sharp consecutive drops in countries with stable banking systems are unusual.

The data, which are for all currencies combined, are not seasonally adjusted and differ slightly from national central bank figures. The measure excludes deposits from central government and financial institutions. (Reporting by Sakari Suoninen)